A week after the Senate passed an amendment to repeal ethanol tax incentives, the House will now consider a similar bill. Representatives Wally Herger (R-CA) and Joseph Crowley (D-NY) have introduced the Ethanol Subsidy Repeal Act, which would immediately repeal the Volumetric Ethanol Excise Tax Credit (VEETC) and the tariff on imported ethanol.
In 2010, an Iowa State University study conducted by Bruce Babcock, professor of economics and director of ISU’s Center for Agricultural and Rural Development, concluded there would be no major loss of jobs or major decrease in ethanol production if both industry supports were eliminated. In a short interview with Farm Industry News today, Babcock said that ethanol production would likely drop just four percent and corn prices would drop about seven percent if the supports were eliminated.
Asked if fuel blenders would use more imported ethanol if the tariff were removed, Babcock said, “No, Brazilians can’t currently meet their own demand.”
In a statement, Rep. Herger said, “The Government Accountability Office and the Congressional Budget Office have concluded that the ethanol tax credit is both wasteful and duplicative.”