Washington, D.C.,
Apr 30, 2008 -
Republican Congressman Jeff Flake, who represents Arizona’s Sixth District, has introduced legislation to curtail incentives Congress has created for ethanol production.
Renewable fuels standards, tax credits for ethanol producers, and protection from international competition through prohibitive import tariffs have created an artificial demand for ethanol. These incentives have pushed farmers away from food production and toward fuel production. Because corn is the primary source for biofuels, the price of corn has soared dramatically, which has had a ripple effect in food prices.
The Remove Incentives to Produce Ethanol Act of 2008 (H.R. 5911) will repeal renewable fuels standards, repeal tax credits for ethanol producers, and repeal tariffs and duties on importing ethanol.
“This is a classic case of the law of unintended consequences,” said Flake. “Congress surely did not intend to raise food prices by incentivizing ethanol, but that’s precisely what’s happened. A jump in food prices is the last thing our economy needs right now.”
