By Senator Ben Nelson
Once again American farmers have come through to help our economic situation. Agriculture is booming even as the broader economy struggles to recover from the recession.
The USDA says farmers are expected to produce the third-largest corn crop and yield-per-acre on record. At the same time prices are rising.
While we need to be cautious that these rising prices do not detrimentally impact the livestock industry, we also must not fall into the false choice of food versus fuel that happened back in 2008.
Food Versus Fuel
Since then, countless academic, economic and government studies have disproven the food vs. fuel myth.
Despite the facts that there is no substantial link between ethanol production and grocery prices, there are those who will use the USDA report to stoke illegitimate fears that demand for corn ethanol will somehow drive up food prices.
Ethanol’s opponents are also trying to use the recent bump in commodity prices to prevent renewal of the Volumetric Ethanol Excise Tax Credit, commonly referred to as the blender’s credit, which is set to expire at the end of the year.
If those critics succeed in cutting ethanol subsidies it would be a terrible mistake that would harm the industry at a time when it’s helping our economy and reducing oil consumption in the U.S.
A proposal in the House Ways and Means Committee would only extend the ethanol tax credit for one-year and at a reduced rate, from 45 cents to 36 cents per gallon.
We need to continue the present tax credit which is why I am a sponsor of S. 3231, the GREEN Jobs Act of 2010 which would extend the current tax credit for another five years.
Continue Current Tax Credit
If this tax credit expires it would have a negative impact on Nebraska and our 25 production plants which makes us the second largest ethanol producing state in the nation. Studies show that expiration of the credit would ripple throughout Nebraska resulting in the loss of more than 13,700 jobs. Nationally, the job loss would total more than 100,000 and reduce ethanol production by nearly 40 percent.
Bipartisan efforts are underway to try and prevent the credit from expiring. I’ve joined with other senators in sending a letter to Senate leaders urging action this year on legislation to extend renewable fuel tax and tariff provisions.
I’ll continue fighting to keep the credit. If it expires it will be a harsh blow to the economy, national security, the environment and America’s efforts to become energy independent.