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Brazilian Sugarcane Industry Association Says Lame-Duck Congress Goes from Bad to Worse on Ethanol Policy
Date:12/3/2010

WASHINGTON, Dec. 3, 2010 /PRNewswire/ -- The Brazilian Sugarcane Industry Association (UNICA) issued the following statement in response to an ethanol proposal floated by Senator Max Baucus, chairman of the Finance Committee. The draft legislation would cut the U.S. ethanol subsidy (known as VEETC or the blenders' tax credit) from 45-cents per gallon to 36-cents per gallon, but extend the tariff on imported ethanol at its current rate of 54-cents per gallon -- doubling the effective trade barrier that benefits corn ethanol from nine to 18 cents.  This statement should be attributed to Joel Velasco, UNICA's Chief Representative in North America.

Despite calls from across the country to reform 30 years of U.S. ethanol policy, some in Congress are intent on making a bad situation even worse. Lame-duck lawmakers are pushing ahead with a plan to charge American taxpayers more than $5 billion per year to subsidize the mature corn ethanol industry, and increase a trade barrier that denies consumers choice at the pump.  These ethanol earmarks will make gas more expensive at a time struggling consumers are looking to Congress for relief.

The ethanol tariff and subsidies date back to the days of President Jimmy Carter, and the historical basis has always been clear: to offset the tax credit so that America does not subsidize foreign producers. Last month, a leading representative of U.S. ethanol producers underscored the rationale saying:

"We've always supported parity on the secondary tariff with the tax incentive. We think the only reason to have the secondary tariff is to protect the taxpayer, not the industry."

- Bob Dinneen, President & CEO, Renewable Fuels Association on November 3, 2010

Now some in Congress are trying to change the rules by making the tariff a true trade barrier rather than a subsidy offset.  The corn lobby may cheer this incr
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SOURCE Brazilian Sugarcane Industry Association (UNICA)
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