King Corn — Our most heavily subsidized support

By Rich Lowry
11 August 2007; Baton Rouge ADVOCATE

Republican presidential candidates flocked to Ames, Iowa, for the Iowa straw poll this weekend, an event that is both an early winnowing process for the GOP presidential field and an object lesson in how one state can hijack the nation’s energy policy.

Ethanol is to Iowans what marijuana is to Rastafarians: a substance that is considered quasi-holy, but only because it delivers really good times. Presidential candidates become fanatical supporters of the corn-based fuel as soon as they begin to compete in the Iowa caucuses. Before it’s over, Mitt Romney might have to promise to use ethanol as pomade and Mike Huckabee — in a naked play for the religious right — to baptize people in the stuff.

We will produce 6 billion gallons of corn ethanol this year, on the way to meeting a mandate of 7.5 billion gallons by 2012. The Senate has passed a mandate for 36 billion gallons of ethanol by 2022, although the additional fuel is supposed to come from sources other than corn — so-called cellulosic ethanol, made from switchback grass and the like. When the agricultural firm Archer Daniels Midland first coaxed ($$$) Congress into subsidizing ethanol a few decades ago, it was just a perversely amusing example of rank corporate welfare. Now, with ethanol distorting markets in America and around the world, it’s not so amusing anymore.

Prior to the Civil War, southerners genuflected before King Cotton. Now, we live in an era of King Corn. It is our most heavily subsidized crop.

We will plant 90 million acres of it this year, up 15 percent from last year. Still, the price of a bushel of corn jumped from $2 to $3 in the past year, thanks to the demand for more ethanol. This is increasing the price of corn-based foods — tortillas have become as much as twice as expensive in Mexico — and meat, poultry and dairy products, since livestock traditionally has been fed corn.

“In some parts of the country,” Jeff Goodell writes in Rolling Stone, “hog farmers now find it cheaper to fatten their animals on trail mix, french fries and chocolate bars.” The higher cost of raising livestock is naturally passed along to consumers. So, with its ethanol mandate, Congress has effectively passed an indirect tax on food. The big winners are agricultural firms that have locked up lots of land, since the price of cropland has gone up 14 percent in the past year. (If your local real estate is slumping, it’s only because you can’t plant corn on it.)

This all might be worth it if ethanol were indeed a miracle fuel. Jerry Taylor of the free-market Cato Institute has demolished the extravagant claims made on its behalf. Even if we turned all corn production in the U.S. over to ethanol production, it would only displace about 12 percent of our gasoline consumption. It might even increase the proportion of oil we get from foreign sources; it will tend first to crowd out high-cost producers in the U.S. and Canada, not, say, the Saudis.

Ethanol isn’t as blessedly green as advertised. It takes coal, natural gas and nuclear power to produce and process it, and it is from these sources that it gets much of its energy. It reduces emissions of carbon monoxide, which isn’t much of a pollution problem today, and increases emissions that create smog, which is a pollution problem. Once the entire process of producing ethanol is taken into account, its reduction in greenhouse emissions is extremely minor, if that. And in the pressure it creates for more farming, it will take land that had been returned to nature and turn it over to environmentally damaging agriculture. (Cellulosic ethanol could avoid many of these problems, but it is more a theory than a fuel.)

Given these problems, we will surely be told eventually that we need to wean ourselves from our dangerous dependence on ethanol. Just don’t expect any presidential candidates to say it in Iowa.

© 2007 by King Features Syndicate