Farewell to 2011 – and the ethanol subsidy

By Michael Marsh,CEO Western United Dairymen Dec. 30, 2011 - - Tomorrow night the clock will tick down and the ball will drop in Times Square to the delight of New Year’s Eve revelers. The clock will likewise tick down on a couple of federal laws to the delight of livestock operators nationwide. An estimated $6 billion in annual federal subsidies provided to oil companies for blending ethanol into gasoline will expire. The U.S. tariff on imports of foreign ethanol into our country will drop by the wayside as well. Some Washington observers and ethanol manufacturers thought this could never occur with a president from the Corn Belt. Others noted that with a secretary of agriculture hailing from Iowa, the demise of these rules was unlikely. The fix was in! But, not so fast! U.S. senators Dianne Feinstein and Barbara Boxer heard the call from dairy farmers in California that the ethanol deal needed to die. By artificially promoting ethanol and thus corn demand, the subsidies had pressed California livestock operations to the tipping point and operations were, after a global recession, struggling to get back on track. It is likely the subsidies also hindered development of next-generation biofuels produced from something other than food. Our senators reached across the aisle and enlisted Republican colleagues to our cause. A historic charge last summer by Senator Feinstein and Senator Coburn from Oklahoma resulted in a 73-27 vote to end the subsidies. The writing was on the wall. Charlie Garrison, from our team on the ground in DC, was pushing this issue every day with our delegation. He also explained the importance of ending the ethanol subsidies to dairy and livestock interests from other parts of the country, sharing information with them and other members of Congress at our request and the behest of our senators. So, thanks for a job well done! We recognize the battle over food for fuel is not over. The Renewable Fuels Standard remains. This must be addressed as well and we are working on it. So, as we bid farewell to 2011 tomorrow night, let’s bid good riddance to the ethanol subsidy and the tariff that some said could never go away.