U.S. ethanol plan questioned | TSLN.com

U.S. ethanol plan questioned

Chris Clayton
DTN Ag Policy Editor

DTN photo by Chris ClaytonWorld Bank Pres. Robert Zoellick thinks some adjustments need to be made in ethanol policies.

DES MOINES, IA (DTN) – Three leading statesmen who focus on feeding the world’s hungry, including two former presidential candidates, said Thursday in the heart of ethanol country that backers of corn-based ethanol should realize the U.S. needs to change its policies.

Robert Zoellick, president of the World Bank, told reporters at the World Food Prize Symposium that research shows sugar-based ethanol has better environmental effects and “doesn’t have the same drawbacks on the food side.” But he added that research on cellulosic ethanol is critically important.

“But I also think people need to be straight about some of the effects of these biofuels,” Zoellick said.

Zoellick added the U.S. has “an unusual combination” with a 51-cent-per-gallon blenders’ credit, a 54-cent import tariff and a Renewable Fuels Standard.

“We’ve got a mandate, we subsidize it and we put a tariff on it,” Zoellick said. “That combination is a little awkward if you are trying to develop it.”

The blenders’ credit drops to 45 cents a gallon in January but the credit and tariff right now do not stop until the end of 2010.

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Former Sens. Bob Dole and George McGovern, the 2008 World Food Prize laureates, also each raised questions about the competition between food and ethanol. McGovern said he felt the U.S. was going to begin facing more problems with its ethanol policies.

“It’s not popular right now for either Bob Dole or George McGovern to go into Iowa or South Dakota or Kansas and say we gotta quit using corn for fuel,” McGovern said. “Farmers are happy everywhere because prices are way up.”

Dole said ethanol backers understand they are going to have to make some changes to policy in the coming years.

“Ethanol is sort of in the bulls-eye right now because of the tariff with Brazil and the big subsidy in ethanol and the mandates,” Dole said. “You can’t say it is a market-based program.”

Dole was the Republican nominee for president in 1996 and McGovern was the Democratic nominee in 1972.

chris clayton can be reached at chris.clayton@dtn.com