The National Corn Growers Association (NCGA) and American Corn Growers Association (ACGA), along with the Farm Bureau and the Renewable Fuels Association, are opposing efforts by House leaders and the Bush administration to suspend import tariffs on ethanol in an effort to reduce prices of ethanol.Both the NCGA and the ACGA said that not only would removing the tariff reduce corn prices and negatively impact a growing U.S. industry, but it would also give a boost to ethanol producers in other countries. The tariff is designed to offset the tax incentive gasoline refiners receive for each gallon of ethanol they blend, no matter where the ethanol originates, according to NCGA First Vice President Ken McCauley.
The ACGA’s Larry Mitchell said removing the tariff would lower corn prices at least 6 cents per bushel for every 1 billion gallons of ethanol imported into the United States. That works out to about $666 million in lost income for U.S. farmers. House Majority Leader John Boehner of Ohio and Sens. John Kyl and Diane Feinstein, have said that a temporary reduction in the ethanol import tariff would help reduce gasoline prices. However Iowa Sen. Charles Grassley and South Dakota Sen. John Thune aid lifting the tariff would be a “victory for the oil companies, a kick in the face of rural America and would leave consumers with the same high gas prices we have today.” Both organizations have said more than 302,000 barrels are being produced daily by the 97 ethanol refineries located in the United States. More than 2.2 billion gallons of additional production capacity is expected to come online within the next 18 months.