Advertise in Print | Subscriptions
Published March 08, 2011, 09:44 AM

National Corn Growers Association wrestles with policy for ethanol credit, tarriff

TAMPA, Fla. — Delegates to the National Corn Growers Association’s Corn Congress struggled during this year’s recent Commodity Classic in Tampa, Fla., to come up with a policy on the ethanol tax credit and protective tariff or an alternative. Also, a key American Soybean Association official said the soybean group will seek an extension of the biodiesel tax credit.

By: Jerry Hagstrom, Special to Agweek

TAMPA, Fla. — Delegates to the National Corn Growers Association’s Corn Congress struggled during this year’s recent Commodity Classic in Tampa, Fla., to come up with a policy on the ethanol tax credit and protective tariff or an alternative. Also, a key American Soybean Association official said the soybean group will seek an extension of the biodiesel tax credit.

“The No. 1 issue is the ethanol industry and how we can protect it,” Corn Growers President Bart Schott, a Kulm, N.D., farmer, said at a March 3 news conference.

But earlier, corn growers were struggling so much to come up with an ethanol policy that they went into executive session. Schott said the delegates decided at that meeting to send the issue back to an ethanol committee and were to take it up again at a final policy meeting March 5.

In December, Congress extended the ethanol tax credit and the protective tariff, but only for one year.

The NCGA now is torn between seeking another longer-term extension of the tax credit and tariff or considering an alternative raised by Growth Energy, an ethanol plant group, that would allow for the tax credit to be reduced in exchange for a government program to help with the construction of blender pumps at gas stations around the country and to encourage the use of more flex fuel vehicles.

Growers also rejected a proposal by Brent Hostetler, an Ohio corn grower, for NCGA to “actively pursue” putting the direct payments that growers get whether prices are high or low into a revenue-based safety net that would trigger payments when a loss occurs. But the vote was 52 percent to 48 percent, a signal of the deep divisions among the corn growers over what policy to pursue on the direct payments in the 2012 farm bill.

While some corn growers defend the direct payments program, which currently costs the government about $5 billion per year for all crop farmers, others want to improve the Average Crop Revenue Election program by moving the trigger for those payments from a state to a county or crop report district level, improve or reduce the cost of crop insurance and make the permanent disaster program work more effectively.

Access to fuel

In a related development, Jeff Broin, CEO of Sioux Falls, S.D.-based Poet, the ethanol construction and operating company that started Growth Energy, said March 3 that the ethanol industry must focus on making the fuel more accessible to American consumers.

“For the first time in 30 years, there is now a crack in the blend wall,” he said, referring to EPA approval of E15, which would allow gasoline to contain up to 15 percent ethanol. “And even with the incredible opposition to E15, I assure you that in time, we will overcome the hurdles to bring E15 to the market.”

Broin, speaking at Growth Energy’s leadership conference in Las Vegas, added that E15 will not remove the need for blender pumps and flex fuel vehicles.

“Any plan that doesn’t include infrastructure is really no long-term solution at all,” he said.

ASA President Alan Kemper, speaking at his group’s news conference, said soybean growers will go to Capitol Hill to ask Congress to extend the biodiesel tax credit, which was also extended in December for one year. Kemper, a Lafayette, Ind., farmer, said the biodiesel tax credit should not be compared with the ethanol tax credit because the biodiesel industry is much younger and still needs the tax credit to get established.

Tags: