Corn-Based Ethanol: Food before Fuel

The American Frozen Food Institute supports public policy that works to keep food prices at a reasonable level for the American consumer. Food prices have risen 83 percent over the last three years. Rising costs at the grocery register have led to increased scrutiny of federal policies that may be partly to blame.

The Energy Independence and Security Act (EISA) of 2007 mandates domestic ethanol production increases from 4.7 billion gallons in 2007 to 9 billion gallons in 2008, to 20.5 billion gallons by 2015 and to 36 billion by 2022 through the expansion of existing Renewable Fuel Standards (RFS). The domestically produced ethanol is currently almost entirely corn-based, but production of corn-based ethanol is capped at 15 billion gallons by 2015 under EISA. A $0.51 tax credit for every gallon of ethanol blended in the domestic supply and an import tariff of $0.54 per gallon also support the U.S. ethanol sector. Some experts argue that these policies mean that less corn is available for food.

Congress should adopt an energy policy that, while promoting sustainable, domestic, and affordable energy sources, does not lead unnecessarily to increased food prices.

High Agricultural Commodity PricesCongressional Research Service
H.R. 6: The Energy Independence & Security Act of 2007Senate Committee on Energy & Natural Resources
Industry Letter to Speaker Pelosi, Minority Leader Boehner, Chairman Dingell and Ranking Member Barton - July 30, 2007RE: Opposition to increasing the Renewable Fuels Standard (RFS) for grain-based ethanol