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A long and winding road to ethanol reform

February 12, 2014
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Last month, I had the opportunity to offer testimony in support of the Environmental Protection Agency (EPA) proposal to modestly scale back the amount of ethanol required to be produced under the Renewable Fuel Standard (RFS). It presented a great chance to reflect on the American Baking Association’s (ABA) long-term efforts to bring market forces to bear on ethanol.

The ABA was an early and lonely leader in the move to change both public opinion and spur policy makers to reform this stance. At the height of the commodity crisis in 2008, the ABA made repeal of the ethanol tax credits and a rollback of the RFS one of the central goals of the Band of Bakers March on Washington.

In 2011, the 30-year-old tax break, long deemed untouchable, was allowed to expire by a Congress dealing with deficits and debt. The ABA highlighted the impact on consumers, due to increasing food prices and commodity market volatility. Once the tax credits expired, the focus moved to bringing food and fuel crops into better balance to take some of the distortion out of the commodity markets.

The ABA has led efforts to support numerous pieces of legislation in Congress to reform the RFS. Its efforts and those of many other organizations that have joined the fight have helped change the debate in Washington and build momentum for reform. Congress will hold several hearings this winter and spring on several of the proposed reforms.

While the EPA’s proposed reduction in RFS for 2014 is encouraging news about the progress being made, its actions have more to do with declining fuel consumption than a sudden reversal of policy. As positive as the EPA’s proposal seems to be, now is not the time to celebrate and ease up on reform efforts.

The rhetoric from corn growers and other ethanol proponents should reinforce the idea that this issue is far from settled. Hour after hour of testimony describing the economic havoc EPA’s modest reduction in the corn ethanol RFS would have on rural America highlighted the intensity of the debate. One farmer even stated that the EPA’s actions violated the trust made to his Revolutionary War veteran ancestor when given a land grant for his service. Clearly, the road to food versus fuel balance stretches out for some distance before us.

Robb MacKie is the president and CEO of the American Bakers Association (ABA) and a chief advocate and spokesperson for the $102-billion wholesale baking industry. A recognized leader in the Washington business community, MacKie serves as a board member of the Business Industry Political Action Committee (BIPAC) and is a member of the Chamber of Commerce’s Committee of 100. He also participates on the Kansas State University’s Grain Science Advisory Committee.

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