The current requirement for national ethanol production in 2008 rests at 9 billion gallons. Governor Rick Perry of Texas wants the Environmental Protection Agency and the Department of Agriculture to cut this requirement by 50 percent to contend with rising food prices. The governor is leading a crusade to ease federal production standards in an effort to save the state’s farmers and reduce the price of corn.
Perry says that the “artificial demand” created by federal agencies to support ethanol producers is wrecking herders and farmers throughout the Lone Star State. This point of view is support by the Texas Cattle Feeders Association whose members feel that ethanol is the primary reason for financial burdens weighing down agricultural producers. The reputation for high production and quality food produced by Texas farmers has been pitted against renewable energy trends in a struggling economy.
Several groups question the governor’s connection of ethanol production to food prices. The Renewable Fuels Association is an advocacy group that takes a pragmatic approach to the issue of ethanol production mandates. The group has responded to Governor Perry’s request by stating that a 50 percent reduction in ethanol production would mean an absence of 4.5 billion gallons of affordable fuel from gas stations throughout the United States. This vacuum would likely increase the price of gasoline and diesel to make up for the demand for fuel.
The Agriculture and Food Policy Center at Texas A&M University has published a report called “The Effects of Ethanol on Texas Food and Feed” that refutes Perry’s claims. This report concludes that a downward trend in ethanol production quotes would not greatly influence the price of agricultural products. Farm experts at Texas A&M cite the costs of gasoline and diesel fuel instead of ethanol production as the main reason for financial hardships in Texas agriculture.
Governor Rick Perry should look at the warning supplied by the center’s report about corn acreage before blaming ethanol producers for high food prices. This warning notes the realistic possibility of drastic increases in corn prices due to the decreased amount of farm acreage devoted to corn this year. The state legislature and executive office may need to look carefully at academic research instead of leaping to quick political action to relieve the issues of food prices and agricultural solvency.
