People beg the EPA to Waive their Ethanol Mandate to lower Food Prices but the EPA Refuses

Posted by PITHOCRATES - November 18th, 2012

Week in Review

People suffering from the high price of corn beg the EPA to waive the ethanol mandate.  To use corn for food.  And not for fuel.  To help hungry children in the US.  And around the world.  Whose parents have to pay higher and higher food prices thanks to a reduced corn crop thanks to those droughts this past summer.  The EPA’s response?  Kids are fat enough already and could stand to lose a few pounds.  Figuratively, of course (see EPA rejects request to waive requirements for corn-based ethanol by David Shepardson posted 11/16/2012 on The Detroit News).

The Environmental Protection Agency on Friday rejected a request from eight governors and nearly 200 members of Congress to waive requirements for the use of corn-based ethanol in the nation’s 240 million vehicles in the wake of this summer’s severe drought.

The move is a victory for corn farmers that have seen prices jump by 400 percent in recent years, but a loss for pork and beef producers who have seen the price of feed jump…

The EPA said it has not found evidence to support a finding of severe “economic harm” that would warrant granting a waiver of the Renewable Fuels Standard.

Can you imagine gasoline prices rising 400% and the government saying they see no economic harm in that?  Can you imagine prescriptions prices rising 400% and the government saying they see no economic harm in that?  Can you imagine the cost of health insurance rising 400% and the government saying they see no economic harm in that?  Of course you can’t.  So why do they not see harm in a 400% rise in corn prices?  Could it be because the ethanol lobby supports Democrat candidates and their environmental policies?  And higher corn prices mean more generous campaign donations?  Perhaps.

“We recognize that this year’s drought has created hardship in some sectors of the economy, particularly for livestock producers,” said Gina McCarthy, assistant administrator for EPA’s Office of Air and Radiation. “But our extensive analysis makes clear that congressional requirements for a waiver have not been met and that waiving the RFS will have little, if any, impact…”

In 2011, nearly half the corn grown in the U.S. was diverted to ethanol production to meet the RFS, critics say…

Food producers — including the makers of frozen food and restaurant chains — have criticized the mandates, saying it raises food prices…

The American Coalition for Ethanol praised the decision by the EPA…

The Michigan Farm Bureau had opposed granting the waiver, saying it doesn’t believe keeping the requirements in place “would severely harm the economy of Michigan at this time.” But Michigan poultry and livestock producers are affected by higher corn prices.

The governors of Maryland and Delaware, also home to poultry producers, told the EPA in October that without a waiver they would face “the loss of thousands jobs.” North Carolina, New Mexico, Georgia, Texas, Virginia, Utah and Wyoming also had asked EPA to waive the requirements.

The EPA conducted several economic analyses and concluded that on average waiving the mandate would reduce corn prices by 1 percent. EPA also said waiving the mandate would not affect household energy costs.

The Democrats talked a lot about arithmetic during the 2012 campaign.  Saying that simple arithmetic proved that they should raise tax rates on rich people.  Because collecting another 5% or so from high income earners would help balance the budget.  Even though we have trillion dollar deficits.  And the proposed tax rate hikes would bring in nowhere near a trillion dollars.  So it would appear the Democrats are arithmetically challenged.  Which probably explains why they say doubling the corn crop (by eliminating the methanol mandate) will only lower corn prices by 1%.  When doubling the supply of any other commodity in the world would cause the price to collapse.

These are the same people that place import tariffs on foreign made goods to restrict supplies to keep domestic prices high.  These are the same people that accuse other nations of anti-dumping violations for flooding the market with their goods.  Which lowers domestic prices.  So these people seem to believe that increasing supply will lower prices.   Except when it comes to corn.  Even if you double the size of the corn crop.  Amazing.

Of course, it’s about the money.  The corn and ethanol producers are getting rich.  Who are only getting rich because of their friends in government.  Which is the definition of crony capitalism.  Or corruption.  The government interferes with market forces.  So their friends and supporters can get rich.  And share that wealth with their friends in government.

And while the crony capitalists are getting rich the American consumer gets poorer.  As they pay more for corn, beef, pork, chicken, eggs, milk, cheese, etc.  Families have to cut back on their grocery budgets.  And cut back on going out.  Because they have less disposable income.  And restaurants have to raise their prices because of the increase in their food costs.  But this is okay as far as the EPA is concerned.  As they put big money political contributions ahead of American families.

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